The Minister, who has kindly sat through all the speeches, has heard me speak before about the issue I am going to raise. I hope he does not raise his eyebrows to the roof and say, “Oh dear, here comes Drax again”, but I am afraid I am going to raise it anyway because my job is to stand up for my constituents and for my police force in Dorset, which does an outstanding job. I pay credit to the outgoing chief constable, Martin Baker, who has been replaced by an another outstanding chief constable, Debbie Simpson. They have both galvanised Dorset police. They have collaborated and they have saved: they have done everything they could in the years before this spending review came in and since. We are

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now down to the bone. I will be parochial in the sense that I will focus my comments on Dorset police and not the police nationally.

I am grateful to our new police and crime commissioner, Martyn Underhill, for a lot of the information that I am going to give—I say “a lot”, but it is not that much and I will not take long—and I concur with his views and concerns. First, it is only fair that I praise the brave men and women of Dorset police; everyone who has spoken has done likewise. We cannot overestimate the courage that these men and women continually show to keep us safe on the streets and at home. While we are all tucked up in bed, many of them are out patrolling the streets at night and tackling some pretty ferocious people while armed with not much more than a protective jacket and occasionally with a Taser if needed.

The comprehensive spending review indicated or demanded savings of 20%. As we have heard, savings across all forces in 2014-15 will be 3.3%. For Dorset, that means a loss of £3.1 million. As has also been mentioned, taking into account the top-slicing in such areas as the police innovation fund and the Independent Police Complaints Commission, Dorset must make savings of 4.8%, which equates to well over £4 million. The point for the Minister is that that will once again place Dorset at the bottom of the pile. I simply cannot repeat it enough. I shall say it again—at the bottom of the pile.

Last year, the formula funding per head in Dorset was the lowest in the land. The needs-based funding formula for policing, which is supposed to determine how much each area receives, has never been properly implemented. Since 2010, Dorset police has been short-changed to the tune of £11 million. In real terms, the figure is a lot more. Last year, Dorset lost more officers and staff in proportion to other forces across the country—a full 6%. During the entire period of the CSR, Dorset will have lost 400 posts.

Whenever I mention or hear the dreadful word “damping”, I cannot help thinking of that awful thing that creeps up from the floor, ruins the walls and costs people a fortune in redecorating their house, but that is the technical jargon. Under damping, each force faces the same reduction in core Government funding in 2014-15, which will exacerbate the inequities that already exist in Dorset.

Let me say to the Minister—if he will stop talking to his Whips—that this situation in Dorset simply cannot go on for ever. Because of its size, topography and population centres, Dorset faces unique police challenges. The county is almost evenly split, with one half living in a large conurbation, and the other half scattered across rural communities. The two halves require substantially different forms of policing. In addition, we have tourism and the night-time economy. I know that many other constituencies have them too, but I am proud to say that Dorset is one of the most beautiful counties in the country. We attract 14 million tourists every year. The thriving night-time economy has grown, as it has in so many other parts of the country, and it requires a significant police presence all year round. One would have thought that those two aspects would be included in a common-sense funding formula, but they are not.

I was a journalist at the BBC in Dorset for some 10 years and I have spoken—often off the record—to the police wearing a different hat. From talking to officers on a busy Friday night, I know that they are

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very thin on the ground. There is no doubt about that. Although crime is down, which I of course welcome, the reality away from this place—we are sitting very comfortably on green Benches—is that brave men and women are out there at 3 o’clock in the morning facing the thousands of people, who are often out of control and drunk, coming out of nightclubs and bars. There are very few officers to tackle those thousands of people.

Over the years, I have been told that because there are so few police officers, they dare not get too involved in many incidents, as that would require two or three officers to go back to the cells, and they simply cannot afford to reduce their numbers on the ground. The logical conclusion is that a situation must get very bad before the police will physically intervene, because they do not have the numbers to deal with it. That is not their fault; in such situations, they simply do not have the numbers on the ground.

The formula originally evolved on the basis of a reasonably even level of council tax across the counties and parity in the policing that was delivered. It no longer works. It is perhaps blindingly obvious that a formula that gives one force 80% of its money from central Government and others, such as Dorset, less than half does not stand up to scrutiny.

Mr Tobias Ellwood (Bournemouth East) (Con): I apologise for joining the debate late, Madam Deputy Speaker.

My hon. Friend makes an important point about the effect of the manning formula in places such as our constituencies in Dorset. Does he agree that the manning formula needs to be reconsidered to take account of the number of visitors who come to a place? Bournemouth swells by 15,000 or 20,000 people on a Friday night. That is not taken into consideration, and it places excess pressure on the limited number of police.

Richard Drax: I concur entirely with my hon. Friend. Because there is a demand for more officers at busy times, such as weekends, those officers are not available on other days of the week. Although there is less crime during the day and in the week, it is equally important that police officers are seen at those times.

Council tax can no longer be increased to pay for grant shortfalls. The recent changes by the Department for Communities and Local Government capped increases at 2%. Due to the shortfall in moneys from central Government, Dorset police has set its precept at 1.96% for 2014-15. Surveys of the public show that they generally support that. Mr Underhill and the chief constable are trying to maintain a balance between sustaining a viable police force and not overburdening the taxpayer. The rise will cover essential expenditure, including on 16 extra police officers, seven rural community vehicles, 300 body-worn cameras and a campaign to make people more aware of cybercrime.

The right hon. Member for Leicester East mentioned technology. Although everyone in this House recognises the value of technology, I have some advice for the Minister. I have many friends in the armed services who went to Iraq. There was a huge reliance on the technology that we and the Americans had, but there was no intelligence from people on the ground or “human

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int.”, as it is called. The result is there for all to see. The west did not understand what was happening on the ground or the consequences of invading a country such as Iraq.

I am sure that there is no intention to invade Dorset, but I draw the comparison because human int. is the key to a successful police force and, more importantly, to tackling crime. Nothing beats seeing police officers on the ground in our constituencies. It happens too rarely, but through no fault of the officers. In the Army, we patrolled around Northern Ireland in groups of 12, day and night. Like police officers, my soldiers brought back valuable information about what they had seen or heard and about what the local hoods were doing, who they were with, what pubs they were visiting and whether they were happy or sad. Such information is crucial in everyday policing.

Unlike the rest of local government, which received a two-year settlement, the police have a provisional finance settlement only for 2014-15. We thought that that would be the last year of savings. I am concerned that they are now likely to continue until 2017-18. It is estimated that Dorset will have to make savings of 3.7% in 2015-16 and 3.5% in each of the following two years, so annual funding will fall from £114.3 million last year to £108.7 million in 2017-18.

The future is bleak in Dorset. I do not like to be negative because I am an optimist. Dorset police is doing everything that it can, but we have been at the bottom of the pile for a long time and the funding formula is grossly unfair to us. Dorset police has identified potentially serious funding problems in 2016-17. Mr Underhill arrived in post and immediately had to face savings of £10 million. He described Dorset police as

“already stripped to the bone.”

Crime figures have fallen nationally and I welcome that—we all do—but calls for assistance and the number of incidents have risen. Despite those pressures, Dorset police has still earned one of the highest levels of public confidence of any police force in the country. But, Minister, enough is enough. For too long, Dorset police has been expected to do more with less. Dorset residents pay the same as, or more than, everyone else in the country, yet they are rewarded with gratuitously low levels of funding for their police. It is to the force’s enduring credit that they have managed so well for so long on so little.

I do not necessarily like speaking so bluntly to the Minister, and certainly not from the Government Benches, but I feel that I have no choice because the situation is so concerning. Dorset police has done all it can, and it continues to look at every possible avenue to provide a better service and better value for money. I agree, in part, with the phrase “value for money”, but if that comes at the cost of losing what I and my constituents want, which is to see police officers on the beat doing the job we want them to do, perhaps value for money should be looked at in a different way. Finally, I ask the Minister to rectify our situation now, before it is too late.

4.31 pm

Ian Paisley (North Antrim) (DUP): I apologise for arriving late to the debate, Madam Deputy Speaker, but I am sure you will forgive me because I was at a debate

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in the other place on the future of the currency in Scotland after 2014, and that is an important issue for us all.

I welcome the reality-check speech by the hon. Member for South Dorset (Richard Drax), and it is important that we pause and carry out a reality check regarding policing budgets in our constituencies and how that affects us. Let me say at the outset that I miss the voice of the former Member for Wythenshawe and Sale East. It was in debates such as this that he really made his mark because he knew the subject so well. His expertise was honed in Northern Ireland when dealing with policing and police infrastructure there, and we miss his wisdom in these debates.

Northern Ireland’s policing is going through a significant change. Our Chief Constable has announced that he intends to step down in September this year after five years of service, which means that we have to open up a new policing competition. No doubt many current deputy chief constables and police chief constables across England, Scotland and Wales will look at the opportunity offered by the job of Chief Constable of the Police Service of Northern Ireland. Our last three Chief Constables were brought in from services on the mainland, and the position offers a significant opportunity that needs to be strongly considered.

I pay tribute to the service of Matt Baggott and what he brought to policing. He was Mr Community Police Chief Constable, and he brought important principles of community policing into our service and on to the books and activities of our police officers, and we should pay tribute to that. I also pay tribute to our Deputy Chief Constable, Judith Gillespie, who has announced her retirement in the spring this year after 32 years of service. She became the highest-ranking female police officer ever to serve in Northern Ireland, which is a huge credit to her and the service she has given. Indeed, she did not take what could have been a lucrative severance package a few years ago, because she wanted to serve her community instead. That in itself should be marked and paid tribute to.

I want to bring key issues of national significance to the attention of the Minister. The National Crime Agency, under the management of Keith Bristow, is a very important development that we support, and I am glad that the House supports it too. What concerns me gravely is that it is being prevented from having operational power in Northern Ireland, because insufficient pressure has been applied by the Minister, or by his team, on the Northern Ireland Executive to sort this matter out. While there is a significant willingness by Unionist parties and the Alliance party to sort it out, they are being checkmated by the nationalist and republican agenda—indeed, it is those people who benefit from the fact that the NCA is not operational in Northern Ireland. They benefit because some of the people they previously ran with—serious and organised criminals—have a free run as the NCA has not been extended to Northern Ireland. Smuggling, prostitution, cross-border crime are not being ignored, but they are not being given the complete, full and proper attention that the NCA could give.

Importantly, our policing budget is being stretched, because our own police officers have to deal with those issues. I, and many politicians across this House, have met Keith Bristow, and I know the Secretary of State for Northern Ireland has met him. He has indicated his

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willingness to be held to account by the current policing infrastructure in Northern Ireland, so that he can give certainty and transparency to the concerns—some legitimate, many fictitious—that some nationalists have raised. It is important that we put that willingness to be held to account on the record. If the NCA continues to be blocked from operating in Northern Ireland, I echo the words of the Northern Ireland First Minister when he spoke to the Select Committee on Northern Ireland Affairs when it met in Northern Ireland. He said that this House should take the matter by the throat and insist that the NCA is put in place, over the head of the Assembly if necessary. Everyone is suffering as a result of what has happened and we should deal with it.

Jenny Chapman (Darlington) (Lab): Does the hon. Gentleman recall that he and I served on the Committee that introduced the NCA? Is he disappointed, as I am, that the assurances of the Minister have not been fulfilled? The comments that the hon. Gentleman is making now are the same as those he made in that Committee.

Ian Paisley: I thank the hon. Lady for saying that. I am delighted that she was listening to me in Committee—I thought we just spoke in this place and that no one actually listened. I am sad that my words were not heeded. We had a commitment from the then Minister with responsibility for policing to get something done and to sort the problem out. Well, it is not sorted out. We have a significant gap in policing national crime. That does not just affect Northern Ireland; it affects what these people do when they export their terrorism here to mainland Britain and on to Europe. We have a national responsibility to sort this matter out, and to sort it out fast.

I was delighted that the right hon. Member for Leicester East (Keith Vaz), the Chair of the Select Committee on Home Affairs, was the first Chair of that Committee to visit Northern Ireland for about 20 years. He paid significant attention to this matter and met the Justice Minister at Stormont and the Chairman of our equivalent Select Committee, Mr Paul Givan. He went through the key issues with him and said that he and his Committee wanted to see the NCA operating properly and effectively in Northern Ireland. I will leave that matter with the Minister and I hope he will pick it up.

We have significant national crime problems in Northern Ireland and that is what I want to focus on in the rest of my remarks.

Andrew Percy: On a point of order, Madam Deputy Speaker. The motion relates to England and Wales and the hon. Gentleman has spoken for a considerable time solely about policing in Northern Ireland. He has just told us that he wishes to go on speaking about Northern Ireland, but the motion in the name of the Secretary of State states:

“That the Police Grant Report (England and Wales)…which was laid before this House…be approved.”

There is no mention of Northern Ireland.

Madam Deputy Speaker (Dawn Primarolo): I am grateful to the hon. Gentleman for pointing that out. I am sure the hon. Member for North Antrim (Ian Paisley) was going to come back in order for the debate on the motion.

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Ian Paisley: I do not believe that I have strayed from the issue. I have been talking about the National Crime Agency, which operates in the whole United Kingdom and whose budget is decided exclusively by this place—[Interruption.] The hon. Member for Brigg and Goole (Andrew Percy) might have a bit of a giggle at that, but it is an important issue that affects criminality and how criminals operate in this country. He should know better. A so-called friend of Northern Ireland should know better than to try to raise a frivolous matter in this debate. I am surprised, because it is not a joke.

The National Crime Agency is a national issue, and the big issues of criminality that affect Northern Ireland have implications here. Of the drugs that circulate around Manchester and Liverpool, most of the cannabis is grown in Northern Ireland. Last year, 42 cannabis farms were discovered in Northern Ireland. Most of the trade was not in cannabis dealing or for smoking the drug in Northern Ireland: cannabis was brought to Liverpool on ferries and boats to be used in this part of the country. Hon. Members should wake up to that reality. The National Crime Agency is not operating as effectively as it should be operating in my part of the kingdom, so the hon. Gentleman and his constituents will face problems. He should recognise that. I am angry about that point, and it probably shows. It is just as well that I am on this side of the House and that there is a red line in front of me; I can tell the hon. Gentleman that.

Fuel smuggling is another important issue that is cross-border and cross-jurisdictional. Because of fuel smuggling in Northern Ireland, Her Majesty’s Revenue and Customs and the Exchequer here lose £600 million a year. That is not a paltry sum. It is enough to run most of the hospitals in Northern Ireland. That is another national issue that is dealt with by HMRC and should also be dealt with by the National Crime Agency.

I now focus on how we pay to deal with national crime. There are 43 police services operational in England, Scotland, Wales and Northern Ireland. Only the Police Service of Northern Ireland picks up the tab for national security policing in its jurisdiction. That is wrong. That tab should be picked up nationally, in the same way that it is picked up for Manchester and Liverpool, here in London and in Scotland. The fact that it is not is putting policing in Northern Ireland at a significant disadvantage. This year, we are running a deficit of £30 million in policing, and next year that will increase to £57 million. In the next spending round, the figure will rise to about £200 million.

I urge the Minister, when he goes back and speaks to his Cabinet colleagues—the Secretary of State for Northern Ireland, the Home Secretary and the Prime Minister—to make the case that this issue should be brought into the centre. Expenditure on dealing with national crime issues and terrorism should be paid for centrally, not locally. If we could get that budget paid for centrally, the current budget for Northern Ireland would allow us to employ the additional police officers that we need.

The Police Federation in Northern Ireland says that we are short of 1,000 officers. The Chief Constable says that he would like to run a competition to get another 300 to 500 officers, so we need to recruit a number of officers that is somewhere in the middle of the two

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figures. The only way we can achieve that is by addressing the deficit in our budget. None of the other 42 police services operational here is asked to pay for national security. Why are the police in Northern Ireland asked to pay for national security? We are not only dealing with Irish-based terrorism but with national criminality—and with Islamic terrorist activity as well. We pick that tab up too, and that is wrong.

The Chairman of the Home Affairs Committee mentioned additional equipment for police officers and the wearing of cameras. They are expensive, but I believe they are useful and should be routinely deployed on police officers, not only to protect them from false allegations, but to ensure that civilians are protected whenever they come across police officers.

I agree thoroughly with the points made by the hon. Member for South Dorset. He made the point clearly that we need more bobbies on the beat. The more bobbies we have on the beat, the more we will see that they disrupt crime and play a very effective role.

I want to focus on an issue that has left a sour taste in everyone’s mouth—plebgate and its impact. Plebgate has left the police in London looking rather poor because of how officers approached a Member of Parliament. It is important that the employment in the Cabinet of the right hon. Member for Sutton Coldfield (Mr Mitchell) is remedied soon. This is the appropriate place to make that point.

4.45 pm

Andrew Percy (Brigg and Goole) (Con): It is a pleasure to follow the hon. Member for North Antrim (Ian Paisley) who, up until his outburst on me, I considered an hon. Friend—I agree with many of his political positions. He said he would go on to speak about policing in Northern Ireland, and I believe I was perfectly entitled to question whether or not that was in order, particularly because I have been sitting in the Chamber from the beginning of the debate waiting to speak, and because the debate relates to the police grant in England and Wales. That is not to decry our fantastic Union—it is always a pleasure and delight to hear about Northern Ireland—but I am sorry he interpreted my attempts to bring him back to order in such a manner. I am sure we will still be friends.

I shall speak to the report as it relates to England and Wales, and my police force in Humberside, which serves the East Riding of Yorkshire and northern Lincolnshire. I speak on the police grant debate most years. I have always abstained on the budget because of my concern, as previous Ministers have heard, about the scale of the reductions. I fully understand and support the need for reductions, but I am concerned about their scale, particularly as they come at the same time as a change in officers’ terms and conditions, which has had an impact on morale. I shall say more about that later.

I tend to say something about the Labour position every year in such debates. In 2007, police numbers were falling in my area—they fell by 137. [Interruption.]It would be nice if I could hear myself. There seems to be some noise coming from the Government Back Benches.

Madam Deputy Speaker (Dawn Primarolo): Order. I will chair the proceedings. If every speaker were heard in utter silence, I would be so pleased, but that rarely

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happens. Perhaps the hon. Gentleman’s hon. Friends can take note that he is struggling to make himself heard above the noise.

Andrew Percy: I am happy to be ignored in perfect silence or to be heckled, but when the noise is so close, it is a little difficult to hear oneself think. One expects an element of quiet—perhaps it comes with being a schoolteacher. The hon. Member for Scunthorpe (Nic Dakin), my neighbour, will concur with the requirement for people to listen in silence.

On the Labour position on policing cuts, 137 officers were cut in 2007 in my area. There was no opposition from Labour representatives at the time. In fact, they supported the reductions and the civilianisation of roles, so I am a little amused when local Labour politicians engage in campaigns against police cuts and reductions in police numbers. They did not have such an issue with them in 2007. I respect the shadow Minister greatly, but I was unclear on the Labour position on funding for our police. He did not rule out cuts—he clearly could not do so given the statements made by the shadow Chancellor—but he did not tell us what the scale of those cuts would be. It is a little unfair for him to be critical of the Government without putting a proper alternative forward.

Jack Dromey: I have great respect for the hon. Gentleman, but let me make myself absolutely clear: the best advice from HMIC was that 12% cuts could be made without impacting on the front line. We accepted that in government and then in opposition, and it has been our position ever since. The problem is that the Government have gone far beyond that, to 20% cuts, and as a consequence we have lost 15,000 police officers, including 10,000 from the front line.

Andrew Percy: We know the argument about whether the figure is really 12% or 14%. Either way, however, Labour has not said how it would pay for it. It has made a range of spending commitments, including repealing various welfare measures, but it has not said how it would pay for them. It is fine to say, “Let’s limit cuts to 12%”, but it is incumbent on the Opposition, who after all aspire to government, to explain how they would pay for it. We did not hear that today.

I am unclear also about neighbourhood policing. In my area, we have seen a move away from neighbourhood policing. We went from ward-based policing—a lot of public money was spent on ward-based police stations that never opened to the public—towards larger local policing teams. That happened before this Government came to power. I heard Labour’s commitment to neighbourhood policing, but we tried it in Humberside, and we have now moved to area-based policing, which has been very effective. It contains elements of neighbourhood policing and best practice, but not quite as originally envisaged.

I concur with colleagues who are unsure whether to believe crime figures—I was critical of them as a local councillor, under the last Government, when major falls were trumpeted—although there has undoubtedly been a fall in crime, particularly in antisocial behaviour. I was a local councillor for 10 years, and it used to be an issue of great concern—there were issues with street corners and public places—but in my experience it has

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now abated. Nevertheless, I do not believe the crime figures as they are presented, not least because a lot of crime still goes unreported. In addition, there are many crimes that years ago would have been reported, but are not now. I had my car broken into five times in 18 months, but I did not report each crime, as would have happened perhaps 10 or 15 years ago. So although we should welcome the general fall in crime, I do not believe it has fallen as far as is claimed.

Local authorities can have an impact on local policing. We have seen an excellent example of that in north Lincolnshire under the leadership of Liz Redfern, who took over the council from Labour in 2011. [Hon. Members: “Hear, hear!”] Absolutely. She pledged to use local council funding to provide additional police community support officers in rural areas so that Humberside police could get on with policing in the urban areas, where the crime statistics showed such policing was necessary. We provided those additional PCSOs through local grants to the police, and only a few weeks ago, I welcomed the new PCSOs, Michelle Thorley and Dan Dreggs, who work out of Epworth and cover the whole of the isle of Axholme. They are doing a great job, funded by the local council.

Despite the massive cuts to local authorities we have heard about, the local council has also provided CCTV funding, and a new CCTV system is now coming into place in Epworth. Moreover, they, along with East Riding of Yorkshire council, have a sharing arrangement with Humberside police for fuel and vehicles, which is to be welcomed, while our police and crime commissioner, Matthew Grove, and his deputy, Paul Robinson, are working on a strategy for sharing buildings, which sometimes involves moving police stations into shared buildings. We must be careful to ensure a continuous presence—we do not want the services diminished—but in fact there is an increasing police presence, and in a couple of weeks a new station will open in my constituency.

The pressure on budgets has led to those developments, which we need to see more of, so I ask the Minister to ensure that funding for local authorities takes account of such innovative practices and working. In my area, Humberside police have received £1 million from the innovation fund to give police officers and PCSOs tablet devices so that they can get out on the front line and be more visible and do their work there, which is to be welcomed. We need funding to support those kinds of measures.

I am working through the 20-day police parliamentary scheme, which the hon. Member for Kingston upon Hull North (Diana Johnson), my near neighbour, completed a few years ago. I have found that incredibly useful. The weekend before last, I did two night shifts with an instant response team based in Clough road police station in Hull, which covers the eastern part of the city. It was an interesting experience. I have done a number of nights in Grimsby, which was also very interesting, as well as joining public order and traffic patrols in my area. I have been struck by how dedicated staff are, but I have also been struck by how under attack some of them feel. They feel the pressure of reduced resources, as well as changes to terms and conditions and to pensions. I have been very defensive on those, particularly on pensions, on which I have had some robust discussions with police officers.

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I am more sympathetic on the issue of how thin the thin blue line can be stretched. I have been uncomfortable with the scale of reductions in spending, although I understand the reasons for them, given the legacy we came to office to deal with. But we have to be careful. We have protection for NHS and school funding. I hope that, in further reductions, we will look closely at policing. In the latest round there has been protection, but we need to move on that. I get a sense from local officers that they are at a point where they can hold the line at the moment, but a small upturn in crime figures might put them under pressure.

I have also been struck by how much of the police work is not actually police work, as has been mentioned. They seem to be massively involved in social work, and in dealing with family disorder and breakdown, alcohol misuse, drug misuse and serious mental health issues. A lot of police officers said to me that they would love to be able to spend their time fighting crime, but they are spending far too much time picking up failings in other services. That must be factored in when we look at the budgets.

Our police service does a fantastic job but I think reform was needed. In my 10 years as a local councillor in Hull, I remember that lots of money was showered on policing locally. Our police precept went up by 500 per cent in the 13 years of the last Government, and a lot of buildings were built that were not open to the public. A lot of money was thrown at initiatives that were not necessarily well thought through or assessed for their effectiveness. It was a question of “There is a problem. Let us throw some money at it and hope it works.” In lots of cases, it did not work. There was a huge waste of money and we are still dealing with the legacy of some of those issues, including the buildings that were built as part of Humberside police authority’s massive expansion programme of police stations that were never open to the public.

Money is not the answer to everything. We know that and I think the Government are going in the right direction in terms of trying to promote innovation. However, we have to be conscious of the fact that we are potentially getting to a point in policing where the line has been stretched very thin and we need to be careful in moving forward. I fear that if there is an upturn in crime any time soon, we may well not be able to respond as we would want to.

Mr Graham Stuart (Beverley and Holderness) (Con): My hon. Friend mentioned the police and crime commissioner. Does he agree that we have seen a fundamental shift from a policing service that was too often looking to Whitehall to one that is grounded in the local community? Does he also agree that Matthew Grove in our area has done a great job of making sure that the police meet local needs, albeit they are struggling with limited resources?

Andrew Percy: Yes, I agree entirely. I shall end with the point that we need to look at whether the PCCs can take over the role of the fire authority as well and try to bring both services together.

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4.58 pm

Damian Green: With the leave of the House, Madam Deputy Speaker, I will try to respond to some, although inevitably not all, of the points made in what has been a very lively and positive debate. I understand that there are concerns about reductions in funding but we are confident that they are challenging but manageable. What we see around the country in the constituencies of many hon. Members is that the police are not just making the necessary savings, but are transforming the way in which they provide the service to the public. In doing so, the measure is whether crime continues to fall—and crime does continue to fall.

Let me deal with one or two of the points made by the hon. Member for Birmingham, Erdington (Jack Dromey) who speaks for the Labour party. Although he spoke for more than 30 minutes, essentially to attack Government cuts, he could not answer whether a Labour Government would reverse any of those cuts. Let me clarify for him that what the Home Secretary and I have said, along with everybody else, is that our only target for the police is to cut crime. We have removed the plethora of detailed targets that the previous Government set the police, which got in the way of cutting crime, and said that cutting crime is the only thing the police need to do.

The hon. Gentleman tried to separate that from crime prevention. Preventing crime contributes to cutting crime and of course that is the most desirable way of doing it. That brings me to neighbourhood policing, which he and the right hon. Member for Salford and Eccles (Hazel Blears) emphasised. One of the things about effective neighbourhood policing—to which I am as committed as anyone—is that it leads to a cut in crime. Effective policing on the ground means that things are spotted earlier. The net effect is that the crime figures continue to come down, so we urge all police forces to do that.

My hon. Friend the Member for Bury St Edmunds (Mr Ruffley) was characteristically forensic and knowledgeable on this subject. He pointed out how money better spent can and does lead to better policing.

The right hon. Member for Leicester East (Keith Vaz), who chairs the Select Committee on Home Affairs, asked about recruitment and morale. I am happy to report that a number of forces are recruiting again—we have heard that Cambridgeshire now has more police. In all those areas, recruitment is extremely attractive. Forces that go out to find new police officers find people pouring in through the door wanting to do the job.

The point made about the formula by my hon. Friend the Member for South Dorset (Richard Drax) is precisely why we are having the biggest review of the formula for more than a decade—so that we get it right and the current unfairnesses are removed.

A number of hon. Members talked about technology. I am glad that the House has welcomed our emphasis on innovation and technology. The whole point about technology is to release police officers to be on the beat and on the streets more often than they are now. That feeds into crime prevention, neighbourhood policing and all the other desirable things we want in policing. If we use modern, digital technology better, we will have more effective and visible police officers. That is at the

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heart of many of the innovations we are making, particularly those we are supporting through the police innovation fund.

People have asked how the technology will be paid for. The answer is that the first round of the police innovation fund was hugely successful and the second round will be two and a half times the size of the first. Police forces up and down the country, along with their police and crime commissioners, are using the fund to drive the use of technology, which will make policing even more effective in the future. I am confident that both the PCCs and the forces will be able to continue to deliver those efficiencies while providing the excellent service that the public deserve. I commend the motion to the House.

Question put.

The House divided:

Ayes 286, Noes 202.

Division No. 212]

[

5.3 pm

AYES

Adams, Nigel

Afriyie, Adam

Aldous, Peter

Amess, Mr David

Andrew, Stuart

Arbuthnot, rh Mr James

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldry, rh Sir Tony

Baldwin, Harriett

Barclay, Stephen

Barker, rh Gregory

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Binley, Mr Brian

Birtwistle, Gordon

Blackwood, Nicola

Blunt, Mr Crispin

Boles, Nick

Bone, Mr Peter

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brokenshire, James

Brooke, Annette

Browne, Mr Jeremy

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burns, Conor

Burns, rh Mr Simon

Burrowes, Mr David

Burstow, rh Paul

Burt, rh Alistair

Burt, Lorely

Byles, Dan

Cairns, Alun

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Cash, Mr William

Chishti, Rehman

Clappison, Mr James

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Cox, Mr Geoffrey

Crabb, Stephen

Crouch, Tracey

Davies, David T. C.

(Monmouth)

Davies, Glyn

Davis, rh Mr David

Djanogly, Mr Jonathan

Dodds, rh Mr Nigel

Dorrell, rh Mr Stephen

Dorries, Nadine

Doyle-Price, Jackie

Duncan, rh Mr Alan

Duncan Smith, rh Mr Iain

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Eustice, George

Evans, Jonathan

Evennett, Mr David

Fabricant, Michael

Fallon, rh Michael

Farron, Tim

Foster, rh Mr Don

Fox, rh Dr Liam

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fuller, Richard

Gale, Sir Roger

Garnier, Sir Edward

Garnier, Mark

Gauke, Mr David

George, Andrew

Gibb, Mr Nick

Gilbert, Stephen

Gillan, rh Mrs Cheryl

Goldsmith, Zac

Goodwill, Mr Robert

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, rh Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, Robert

Hames, Duncan

Hammond, rh Mr Philip

Hancock, Matthew

Hands, Greg

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Harvey, Sir Nick

Haselhurst, rh Sir Alan

Hayes, rh Mr John

Heald, Oliver

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollingbery, George

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Horwood, Martin

Howarth, Sir Gerald

Howell, John

Hughes, rh Simon

Hunt, rh Mr Jeremy

Huppert, Dr Julian

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Javid, Sajid

Jenkin, Mr Bernard

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kirby, Simon

Knight, rh Sir Greg

Kwarteng, Kwasi

Lamb, Norman

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Leadsom, Andrea

Lee, Jessica

Lefroy, Jeremy

Leigh, Sir Edward

Lewis, Brandon

Lewis, Dr Julian

Lilley, rh Mr Peter

Lloyd, Stephen

Lord, Jonathan

Loughton, Tim

Luff, Sir Peter

Lumley, Karen

Macleod, Mary

Maynard, Paul

McIntosh, Miss Anne

McPartland, Stephen

Menzies, Mark

Mercer, Patrick

Miller, rh Maria

Milton, Anne

Mitchell, rh Mr Andrew

Moore, rh Michael

Mordaunt, Penny

Morgan, Nicky

Morris, Anne Marie

Morris, David

Morris, James

Mosley, Stephen

Mowat, David

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Murrison, Dr Andrew

Neill, Robert

Newton, Sarah

Nokes, Caroline

Nuttall, Mr David

O'Brien, rh Mr Stephen

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Ottaway, rh Sir Richard

Paice, rh Sir James

Paisley, Ian

Parish, Neil

Patel, Priti

Pawsey, Mark

Penning, Mike

Penrose, John

Phillips, Stephen

Pickles, rh Mr Eric

Prisk, Mr Mark

Pritchard, Mark

Pugh, John

Raab, Mr Dominic

Redwood, rh Mr John

Rees-Mogg, Jacob

Reid, Mr Alan

Rifkind, rh Sir Malcolm

Robathan, rh Mr Andrew

Robertson, rh Hugh

Robertson, Mr Laurence

Rosindell, Andrew

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shepherd, Sir Richard

Simmonds, Mark

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Smith, Sir Robert

Soames, rh Nicholas

Spencer, Mr Mark

Stanley, rh Sir John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, rh Sir Andrew

Sturdy, Julian

Swayne, rh Mr Desmond

Tapsell, rh Sir Peter

Teather, Sarah

Thornton, Mike

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Walker, Mr Charles

Walker, Mr Robin

Walter, Mr Robert

Ward, Mr David

Weatherley, Mike

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Williams, Mr Mark

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Zahawi, Nadhim

Tellers for the Ayes:

Claire Perry

and

Mark Hunter

NOES

Abbott, Ms Diane

Abrahams, Debbie

Ainsworth, rh Mr Bob

Alexander, rh Mr Douglas

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Ashworth, Jonathan

Bain, Mr William

Banks, Gordon

Barron, rh Kevin

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blears, rh Hazel

Blenkinsop, Tom

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, rh Mr Gordon

Brown, Lyn

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Campbell, Mr Alan

Campbell, Mr Ronnie

Caton, Martin

Chapman, Jenny

Clark, Katy

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Connarty, Michael

Cooper, Rosie

Cooper, rh Yvette

Corbyn, Jeremy

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Cunningham, Sir Tony

Curran, Margaret

Danczuk, Simon

Darling, rh Mr Alistair

David, Wayne

Davidson, Mr Ian

Davies, Geraint

De Piero, Gloria

Denham, rh Mr John

Dobson, rh Frank

Docherty, Thomas

Doran, Mr Frank

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Dugher, Michael

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Ellman, Mrs Louise

Engel, Natascha

Esterson, Bill

Evans, Chris

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Francis, Dr Hywel

Gapes, Mike

Gardiner, Barry

Gilmore, Sheila

Glindon, Mrs Mary

Goodman, Helen

Greatrex, Tom

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hanson, rh Mr David

Havard, Mr Dai

Healey, rh John

Hermon, Lady

Heyes, David

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hoey, Kate

Hood, Mr Jim

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

Jackson, Glenda

James, Mrs Siân C.

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Helen

Kaufman, rh Sir Gerald

Keeley, Barbara

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewell-Buck, Mrs Emma

Love, Mr Andrew

Mactaggart, Fiona

Mahmood, Shabana

Mann, John

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McDonagh, Siobhain

McDonald, Andy

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McKechin, Ann

McKenzie, Mr Iain

Meale, Sir Alan

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morden, Jessica

Morrice, Graeme

(Livingston)

Morris, Grahame M.

(Easington)

Munn, Meg

Murphy, rh Mr Jim

Murray, Ian

Nandy, Lisa

Nash, Pamela

O'Donnell, Fiona

Onwurah, Chi

Osborne, Sandra

Owen, Albert

Pearce, Teresa

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Jamie

Reeves, Rachel

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruddock, rh Dame Joan

Sarwar, Anas

Sawford, Andy

Seabeck, Alison

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Owen

Spellar, rh Mr John

Straw, rh Mr Jack

Stringer, Graham

Stuart, Ms Gisela

Tami, Mark

Thomas, Mr Gareth

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Walley, Joan

Watts, Mr Dave

Whitehead, Dr Alan

Williamson, Chris

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Woodcock, John

Wright, David

Wright, Mr Iain

Tellers for the Noes:

Nic Dakin

and

Susan Elan Jones

Question accordingly agreed to.

12 Feb 2014 : Column 922

12 Feb 2014 : Column 923

12 Feb 2014 : Column 924

Resolved,

That the Police Grant Report (England and Wales) for 2014-15 (HC 1043), which was laid before this House on 5 February, be approved.

12 Feb 2014 : Column 925

Local Government Finance

[Relevant documents: Oral evidence to the Communities and Local Government Committee on 27 January, HC 1024.]

Madam Deputy Speaker (Dawn Primarolo): I can report to the House that the Select Committee on Statutory Instruments has cleared the two reports that are to be debated.

5.16 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): I beg to move,

That the Referendums Relating to Council Tax Increases (Principles) (England) Report 2014-15 (HC 1056), which was laid before this House on 5 February, be approved.

Madam Deputy Speaker: With this we shall consider the following motion:

That the Local Government Finance Report (England) 2014-15 (HC 1055), which was laid before this House on 5 February, be approved.

Brandon Lewis: Members on both sides of the House may well be aware that until now the Secretary of State has not missed a local government finance settlement debate in this Parliament. He sends his apologies, and hopes to join in the debate later in the evening, but, as I am sure Members will understand, he is currently attending a Cobra meeting.

The coalition Government have been working determinedly to restore the public finances, which were left in such disarray by the last Labour Government. It has been complicated and difficult work, and difficult decisions have had to be made. It is in the context of our responsible, long-term economic plan that we have been consulting on the local government finance settlement for 2014-15. Our proposals are fair and balanced, and provide an effective basis for all local authorities to transform local services and promote efficiency. Following a wide range of representations and meetings, we confirmed last week that the settlement would remain almost entirely as announced in December. This is effectively the second year of a two-year settlement, which gives councils a new level of self-determination so that they can take control of their own finances.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): May I return the Minister to the words “fair and balanced”? The average cut in spending power for 2014-15 across England will be £71.44, whereas in Birmingham it will be twice that, at £145.33. How can I explain to people in Birmingham that that is “fair and balanced”?

Brandon Lewis: I am sure that the hon. Lady will not be surprised to learn that authorities such as Birmingham have higher spending power in the first place. The 10 most deprived areas in the country have an average spending power of £3,026 per dwelling, while the average spending power of the 10 least deprived is about £1,900.

Sir Alan Beith (Berwick-upon-Tweed) (LD): How can it be fair that my constituents in Northumberland pay a third more in council tax than the urban residents in Newcastle, but receive £100 less per head in services?

12 Feb 2014 : Column 926

Our Government have done so little so far to deal with the unfairness that the last Government left for rural areas.

Brandon Lewis: Actually, that is not an unreasonable point. Members highlight the changes in spending power between the different authorities, but they sometimes forget that some of them had high spending power in the first place. The contrast between areas like Newcastle and Windsor is very marked.

Grahame M. Morris (Easington) (Lab): On that point about fairness, does the Minister recognise that areas like County Durham have high levels of deprivation and need? For example, the cost of looked-after children is much greater in such areas, because the numbers involved are much greater proportionally in places like Durham, Birmingham and Newcastle than in more affluent areas such as Wokingham.

Brandon Lewis: I think the hon. Gentleman will find that that is why those areas have substantially higher spending power in the first place. He should also note that a member of his own Front-Bench team supported the petition for a fairer spread between urban and rural areas a couple of months ago.

Mr Graham Stuart (Beverley and Holderness) (Con): Urban areas receive 50% more in central Government grant than rural areas which, contrary to what some Opposition Members suggest, have lower average incomes, so poorer people are paying higher taxes and getting fewer services. That cannot be sustained.

Brandon Lewis: My hon. Friend has made that point about rural areas with great passion on a number of occasions, and I will deal with it in a moment.

After years of doffing their caps to central Government and talking down their areas to scrape together more handouts, councils can now embrace the autonomy that this settlement gives them. Councils have risen to the challenge of delivering more for less, but local government spending still accounts for a quarter of all public spending. In the current year, it will spend £117 billion, which is £3 billion more than last year. That makes the local government bill bigger than that of the NHS and double the defence budget. It is therefore necessary for councils to continue to find sensible savings.

Mr David Burrowes (Enfield, Southgate) (Con): Speaking of fairness, I believe that it is fair to the hard-pressed taxpayers in my constituency that their council tax has been frozen, not least because the Government have given us more than £7 million to enable that to happen. That funding was opposed by the Labour opposition.

Brandon Lewis: My hon. Friend makes a good point. It is good to see councils across the country freezing council tax and moving away from the situation that we had under the last Government, when it roughly doubled.

Andrew Percy (Brigg and Goole) (Con): On the subject of how councils spend their money, North Lincolnshire council, which has been Conservative-run since 2011, has frozen its council tax for four years despite the funding cuts and despite having less per head than other councils. It has reversed the previous Labour council’s

12 Feb 2014 : Column 927

cuts to youth services and increased spending on and the building of new libraries. It is also replacing damaged and leaking classrooms, which the previous Labour council did not do. It has managed to do all that without having to place any extra burdens on council tax payers. This can be done if councils are prepared to show true leadership by cutting the people at the top rather than the services at the bottom.

Brandon Lewis: My hon. Friend makes a good point. The leader of that council is Liz Redfern, and it is a great example of a well run council. It is showing that we can deliver more for less. Good councils across the country are changing the way in which they deliver services by doing exactly the kind of work that my hon. Friend has outlined.

Mr Jim Cunningham (Coventry South) (Lab): We cannot always place the burden on local authorities. In Coventry, for example, the cumulative effect will be a cut of 24%, involving 1,000 jobs. More important, children’s services and social services will be cut, and education services will be cut, which will affect school build. The Government are setting the clock back: when they impose a freeze, it is like a dam that will burst in three or four years’ time.

Brandon Lewis: If the hon. Gentleman looks at the statement we made before Christmas, he will see that that is not the case, because we have rolled the freeze grant into the base to help councils. I suggest that his council may want to listen to councils such as North Lincolnshire, which has shown that it can achieve improvements in services, even while spending less.

Sir Paul Beresford (Mole Valley) (Con): I have been in the Minister’s position, albeit some time ago, and I wonder whether he agrees that some Members are engaging in bad cherry-picking by pointing out certain difficulties. They also point out that the system of calculation is complicated, but the reason it is complicated is that it uses a balance of factors that suits each individual local authority. It is therefore unfair to pick out the difficult cases without balancing them with the others.

Brandon Lewis: My hon. Friend, with his experience, makes a clear point, which highlights how some Labour Members sometimes like to forget the starting point from which they are working and what high spending power some of these authorities have.

Anne Marie Morris (Newton Abbot) (Con): I congratulate the Government on changing the Bellwin formula at this point, which is relevant to the local government settlement. The percentage has gone from 85% to 100%, and the limit has now been relaxed from £1.7 million to £1.1 million. That is good, but my local authority tells me that although their pothole gangs have gone from 13 to 35, all planned work, other than drainage work, has had to be put on hold, so there is still a need for more.

Brandon Lewis: I thank my hon. Friend for that, and I know she is rightly fighting hard for her area. As the Prime Minister said today, we must make sure that we

12 Feb 2014 : Column 928

do all that we can to ensure that areas have everything they need in this situation, and I will discuss flooding in a few moments.

Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op): On the Government’s own figures, Liverpool has the highest level of deprivation in the country, yet it has an entrepreneurial council that is working hard to back business and support jobs. In those circumstances, with the council showing so much initiative against a background of such adversity, why has Liverpool suffered the greatest cuts of all local authorities in the country?

Brandon Lewis: Actually, it has not. A council that has some of the greatest cuts is my own local authority in Great Yarmouth, which was left a black hole by the last Labour Government through the working neighbourhoods fund. I gently say to the hon. Lady that she might want to remind Mayor Anderson that Liverpool’s authority has £116 million in reserve, one of the highest spending powers in the country in the first place, a regional growth fund and a city deal. This Government are working with such local authorities.

John Hemming (Birmingham, Yardley) (LD): I thank the Minister for meeting MPs from Birmingham to look at this issue, and I congratulate hon. Members generally on highlighting the difficulty of working out what a fair system is for allocating local government finance. The Government have focused on percentage reductions in spending power. Does the Minister agree that, after incentives, looking towards the reduction in percentage spending power, not absolute spending power, provides an equality of pain that gives us a way forward? It takes into account the fact that in areas like Greater Birmingham, where people work in Birmingham but live around it and require services from Birmingham but are not contributing towards—

Madam Deputy Speaker (Dawn Primarolo): Order. Before the Minister replies, may I remind the House that 17 Members wish to participate in this debate? Interventions must be short, and I will start to interrupt them if they continue to be as long as they have been so far.

Brandon Lewis: Thank you, Madam Deputy Speaker. The hon. Gentleman made that point in the meeting we had. As I said to him, I will happily go through it in more detail over the next couple of months, meeting him and officials to look at some of the ideas he is talking about.

Several hon. Members rose—

Brandon Lewis: I will make a bit of progress, bearing in mind what Madam Deputy Speaker said, and then take more interventions.

It is necessary for councils to continue finding sensible savings, to modernise services and to cut back on waste. Recent opinion polls have shown that that is achievable, and we have examples from around the country of councils doing just that. The level of satisfaction with councils is increasing compared with the situation in 2010, highlighting that even when savings are being made councils can maintain or improve services for residents.

12 Feb 2014 : Column 929

This year’s settlement is fair. It is fair to north and south, rural and urban, metropolitan and shire. Let us be clear that next year councils will be armed with significant spending power, averaging £2,089 per dwelling; the top 10 most deprived councils in the country will average more than £3,000 per dwelling compared with a figure of about £1,900 per dwelling for the least deprived areas. We are protecting cities and those authorities facing a higher demand for services, despite what the Opposition suggest. As I say, the top 10% most deprived authorities will be more than £1,000 per household better off than the least deprived 10%. Places such as Newcastle receive £2,400 in spending power, about £900 more than places like Windsor and Maidenhead.

Simon Kirby (Brighton, Kemptown) (Con): I do not agree with the Minister about Brighton and Hove’s council being satisfactory. The bonkers Green Brighton and Hove council is sitting on tens of millions of pounds of reserves, is spending millions of pounds on its leadership teams and is totally out of touch with residents. What can the Minister do about it?

Brandon Lewis: My hon. Friend has done a great deal by bringing this matter to the attention of Members and putting it on the record. What I say to councils, including the one in Brighton, is that they should do the right thing by their residents and freeze council tax to help hard-working people and families. We understand the pressures that all authorities face, and the division of funding demonstrates that we have tried to be fair.

John Healey (Wentworth and Dearne) (Lab): How on earth can the Minister say that this settlement is fair when, three months ago, the Audit Commission, the local government expert, said that

“councils in the most deprived areas have seen substantially greater reductions in government funding as a share of revenue expenditure than those in less deprived areas”?

Is the Audit Commission wrong?

Brandon Lewis: As I said just a few moments ago, 10% of the most deprived areas of the country have an average spending power of £3,026 per household, compared with £1,900 for the least deprived 10% of areas. We must bear that starting point in mind. The most deprived areas have greater spending power. The average reduction in spending power this year is just 2.9%, with no council being more than 6.9% worse off. This is the highest level of protection that we have been able to offer councils in three years.

Mark Pawsey (Rugby) (Con): The Minister has spoken about councils being able to put a freeze on council tax for a further year. Does he not realise that many councils could see what was coming? It did not take a genius to see that the financial situation in 2010-11 would be difficult. Rugby borough council recognised that, and is now looking at a council tax cut for the coming year.

Brandon Lewis: Again, my hon. Friend gives a good example, to which I will be referring in just a moment. Good councils have planned for this and worked for their residents. Not only are they able to freeze the council tax, but in some cases, councils such as Rugby have done the excellent thing and cut council tax.

12 Feb 2014 : Column 930

Jack Dromey (Birmingham, Erdington) (Lab): Birmingham has cut £300 million from back-office services, but is still reeling from the biggest cuts in local government history. It is losing 23% of its spending power, while Wokingham is gaining 1%. How can it be right that the 10 most deprived areas are hit 10 times harder than the 10 least deprived areas? How can that be fair?

Brandon Lewis: The 10% most deprived areas in the country and the areas with the most need have a higher spending power in the first place and get a bigger Government grant.

Richard Burden (Birmingham, Northfield) (Lab): On this issue of spending power, may I take the Minister back to the first and second answers that he gave and see how he puts them together? My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) talked about the reduction in spending power in a deprived area such as Birmingham. The Minister said, yes, but it has a higher spending power in the first place. My hon. Friend the Member for Easington (Grahame M. Morris) then said that the reason—

Madam Deputy Speaker (Dawn Primarolo): Order. This is not an opportunity to make a speech. I want the hon. Gentleman to put a short question to the Minister.

Richard Burden: The Minister said that the reason was that such areas have higher needs. If that is the case, let us go back to the same question: why do the most deprived areas with the highest needs get the biggest reductions?

Brandon Lewis: It is best to refer the hon. Gentleman to the answer I gave a few moments ago.

In response to the question about flooding asked by my hon. Friend the Member for Newton Abbot (Anne Marie Morris), let me say that we are currently experiencing the wettest winter for 250 years, and that has an impact on local authorities’ finances. Many are working tirelessly for the safety of their communities. The Government have made it clear that they are committed to supporting them unequivocally. The severe flooding and storms have affected rural and urban, town and country alike from Great Yarmouth to Dawlish.

Sixty-two local authorities have thus far indicated that they will apply under the Bellwin scheme for financial assistance. The grant reimburses local authorities for the cost of their immediate actions to safeguard life and property. We have enhanced the terms of the Bellwin scheme in response to the most recent severe weather events. The floor has been lowered so that more councils can apply, which will be of particular benefit to the unitary and county authorities. We estimate that that could be worth an extra £15 million to those councils, and we will be paying 100% above the threshold as opposed to the previous 85%. For the longer term, I am committed, along with my colleagues across Whitehall, to undertake a review of the Bellwin scheme to assess what changes may be needed in the light of more frequent and challenging weather events. Members will no doubt already have noted that we have provided a £7 million severe weather recovery fund for those areas affected before and over Christmas.

12 Feb 2014 : Column 931

We have also listened to the wider concerns—I note the comments that have been made in interventions already this afternoon—of colleagues in rural areas about the extra challenges their local authorities might face in achieving service delivery efficiencies. We are topping up the rural services delivery funding by an extra £3 million this year, including the extra £2 million announced today, so it is now worth £11.5 million, which is a further boost to the 95 authorities that will benefit this year.

Stephen Gilbert (St Austell and Newquay) (LD): Does the Minister not recognise, however, that that is less than the cost of employing an officer to work out what the missing money between the rural and urban split would be? Three million quid divided by 95 local authorities is about 30 grand each.

Brandon Lewis: The difference between the urban and rural authorities is between 13% and 10% when it comes to spending power, depending on whether we are looking at the counties or the districts. We will be working with the Department for Environment, Food and Rural Affairs over the next few months to do some research on the difference in the cost of delivering services, which is raised regularly by Members from rural constituencies, and get to the bottom of the issue.

Andrew George (St Ives) (LD): No doubt the Minister has studied the case made by the Rural Fair Share campaign and will be aware that Cornwall, for example, is not only rural, but among the most deprived areas of the country. Does he accept the principle that there is a comparative unfairness between urban and rural local authorities? Even if he cannot address the issue now, does he accept that the Government should address it in time?

Brandon Lewis: As I have said, the difference in spending power between urban and rural areas is between 13% and 10%—unless we are talking about a fire authority, in which case it is plus 3 for rural areas—so there is definitely a gap between the two. The work that DEFRA will do will look at differences in the costs in rural and urban areas.

Bill Esterson (Sefton Central) (Lab): On fairness, the Minister earlier compared Newcastle and Windsor. Is he aware that Rob Whiteman, the chief executive of the Chartered Institute of Public Finance and Accountancy, has said:

‘When Government ministers compare such different councils as affluent Windsor and metropolitan Newcastle in an attempt to justify the “fairness” of the settlement it only serves to highlight how out of touch this process has become’?

Brandon Lewis: I am sorry if the hon. Gentleman feels that way about his hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who used that very comparison himself.

Dr Sarah Wollaston (Totnes) (Con): To return to flooding, can the Minister confirm whether he will be making an application to the solidarity fund? I know

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that the threshold is high, but if it is taken on a regional basis that would be a really helpful source of additional funding for the south-west.

Brandon Lewis: My hon. Friend tempts me away from the local government finance settlement. The Government look at such things, but the fund currently has a threshold of about £3.7 billion, and the Government would have to pay back the majority of what we got because of the way the mechanism works.

Daniel Kawczynski (Shrewsbury and Atcham) (Con): Further to the point made by the hon. Member for St Ives (Andrew George), will the Minister give us a guarantee that in the longer term he will grapple with the issue of funding for rural areas? Shropshire is the largest land-locked county in England, and providing services in such large areas inextricably costs more.

Brandon Lewis: My hon. Friend makes his case strongly, as ever.

Paul Farrelly (Newcastle-under-Lyme) (Lab): Fortunately, in Staffordshire the Trent has not flooded, but we are facing cuts across the board—to the police, youth services, disability services and now libraries. In Newcastle-under-Lyme the actual cash cut has been 13.6%, but under total revenue spending power it magically becomes just 4.4%. Which figure is correct?

Brandon Lewis: I suggest that the hon. Gentleman should look at spending power, which is what the Local Government Association prefers to use, because it outlines the amount of money and the way local councils have influence and control. It is the entire spend that a local authority has; it does not just single out one small part of its funding. That is an important change in how local government finance has worked, as we are now moving to a system in which more and more of the money is in the entire control of local authorities with their own autonomy.

Mr Clive Betts (Sheffield South East) (Lab) rose—

Brandon Lewis: I will give way to the Chair of the Communities and Local Government Committee before making some progress.

Mr Betts: I draw the Minister’s attention to what he told the Committee on 27 January. He said that the system is changing from one based on allocation according to need, which now will be reflected merely in the base business line rate in 2013-14. Basically, the Government will distribute grant according to local authorities’ ability to raise their own resources. Is that not a fundamental change?

Brandon Lewis: It is a total change away from the begging bowl system to a reward-and-incentive-based system for local authorities.

Mr Adrian Sanders (Torbay) (LD): Does not this debate highlight what these debates have highlighted year after year—the lack of transparency in being able to judge one side against the other? Every council has had to deal with cuts; some have dealt with them well and some have not. How can voters judge which is which?

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Brandon Lewis: In my experience, voters are pretty good judges of what is a good council as opposed to what is a bad council. We have already heard examples of councils that are doing really good work in transforming the way in which they deliver services and work together. I will come to that specifically in a moment.

We are continuing to encourage councils to grow their own economies. Last year’s transformation challenge award incentivised councils to rethink how they go about their business and to transform fundamentally the structure of their local services. Eighteen areas received a share of £7 million to jump-start innovative projects. Following this success, we will continue with the transformation challenge this year, and I will announce the terms and details shortly.

The expertise that councils have shared with other councils and the expertise being shared through the community budget pilots and the transformation network highlight the fact that this is the right approach. Authorities such as Staffordshire Moorlands and High Peak are showing that they can save about 18% by sharing management and working in a different way. Likewise, South Holland, Breckland and other councils around the country are working more innovatively.

Julian Smith (Skipton and Ripon) (Con): Does the Minister agree that the Government’s £600 million-plus investment in rural broadband is another route for councils to make significant efficiencies?

Brandon Lewis: My hon. Friend makes a good point. The transformation of how we communicate, particularly through broadband, makes it possible to do many more things more efficiently and effectively, and it will no doubt continue to change how we deliver services and are able to work together across authorities.

The efficiency support grant has further incentivised transformation. The councils facing the largest spending reductions, many of which were in that position because they were abandoned by Labour’s reduction in the working neighbourhoods fund and left with a black hole in 2010, are now being given a leg-up towards making these savings through the transitional grant. I must declare my interest, as Great Yarmouth is one of the authorities that Labour left stranded. Authorities receiving the grant are protected by our safety net, which is bigger and stronger than last year. Despite some areas choosing to play politics with this—I am disappointed that Labour-run Great Yarmouth borough council refuses to follow the lead of other councils, sometimes even cross-party—councils such as Hastings and Pendle are doing some really good work on transforming things. Areas such as High Peak and Staffordshire Moorlands are working cross-party to share management and show the way to savings of about 18%. They are showing the way forward, and I hope that others will follow. Those in receipt of funding are making progress with their efficiencies, with many going a long way towards that, including many Labour-led areas. There is, however, more to do.

Hazel Blears (Salford and Eccles) (Lab): I agree that transformation, integration and doing things differently is one way of mitigating the impact of the cuts. However, over the past few years my local authority in Salford has already cut our adult social care budget by £21 million.

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We were the last local authority in Greater Manchester to have to retreat to the position of providing support only to people with serious and critical needs. That means that 1,000 people in Salford will no longer receive support and care from the local authority. Those are real families in great distress, and the Minister must at least take account of that.

Brandon Lewis: I would be happy to meet the right hon. Lady and other Members from Salford if that would help. In a moment, I will touch on the better care fund, because we do need to look at how we change, reform and transform the delivery of adult social services, particularly social care. That is one of the things that my Department and the Department of Health are working on. I am working closely with the Minister of State, Department of Health, my hon. Friend the Member for North Norfolk (Norman Lamb), to deliver for local authorities.

We want to go further with the efficiency support grant. The Government do not want to continue as we have had to do, year after year, in patching up problems left from the Labour legacy. We have listened to authorities and to Members—not only me, before I was in post, but those such as my hon. Friends the Members for Hastings and Rye (Amber Rudd) and for Pendle (Andrew Stephenson)—about dealing with this issue once and for all and finding a permanent fix. Therefore, for councils that are on track with their efficiency plans and are delivering on the second year of their business plans, which we will review later this year, the grant will be rolled into their settlement in 2015-16. This a massive opportunity—a big reward—that will go a long way to filling, once and for all, the black hole in which seven authorities were left by Labour.

Andrew Gwynne (Denton and Reddish) (Lab): May I ask the Minister whether his Department has done any kind of research into the long-term financial viability of local authorities? We already know that some are nearing the cliff edge, so what assessment has his Department made and what will he do to make sure that they do not go bankrupt?

Brandon Lewis: I refer the hon. Gentleman to the work showing not only that local authorities are coping well, but that good ones are improving front-line services.

Mr Burrowes: My hon. Friend mentioned the legacy from Labour. He will know, not least from Great Yarmouth, that damping is an issue for Enfield. Damping poses a structural challenge for places such as Enfield, with unmet need that is embedded year after year, and it does not reflect the growing population and deprivation issues.

Brandon Lewis: I thank my hon. Friend for raising the important issue of damping. I know that hon. Members have differing views about it, but it means that we can have stability in the baseline. It also recognises need as we move towards a new system, the business rates retention scheme, which I will turn to in a few moments.

Councils can become masters of their own destiny in other ways. The new homes bonus rewards councils that have increased the local housing supply, helping them to meet the needs of a growing community. In 2014-15, the new homes bonus will be worth £916 million, which

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is money for councils to spend as they see fit. Those authorities that have had an increase in their funding—Members have mentioned some of them—have had that increase because they have done the right thing: they have built more houses, and they have got more money for doing so.

The business rates retention scheme has revolutionised the potential to grow local economies, and has given councils a hand in their success. Under the previous Government, councils did not get to see that money—£11 billion in business rates—that they can now retain. Councils sit on a total of £230 billion of assets, and we must do more to turn those assets into better services for local people.

Chi Onwurah (Newcastle upon Tyne Central) (Lab): The Minister has talked about giving councils greater control over their spending, which has been reduced hugely—for example, Newcastle has lost £100 million—and about the new homes bonus, which is top-sliced from councils’ money and then controlled by this Government. How does he reconcile the Government’s apparent liberating of councils with their control of councils’ money?

Brandon Lewis: As we have said before, the Government are moving to a different system, in which councils are incentivised for doing things. The new homes bonus is a good example: if they build houses, they will get more money. Councils that need more support with creating or changing to cutting-edge services will now be able to use up to £200 million from asset sales to pay the one-off costs of service transformation.

The autumn statement protected local authorities from further cuts to services by setting out a two-year settlement, so allowing councils to plan for the longer term and to have stability in the services they provide to taxpayers. This year, we are publishing illustrative figures for 2015-16 to enable councils to do that.

As was announced in the spending round, £3.8 billion will become available from the better care fund in 2015-16. That touches on a point made by the right hon. Member for Salford and Eccles (Hazel Blears). The better care fund is a real opportunity for local authorities. It will give our civic leaders a once-in-a-lifetime opportunity not only to encourage better working between their local NHS and social care services but, importantly, to change for the better the lives of the most vulnerable people in our communities. Such a stable platform for forward planning, which is part of our long-term economic plan, will provide councils with the scope to merge back offices, to tackle fraud and to save £2 billion. Improving council tax collection will help to bring in the outstanding total of £2.4 billion in uncollected council tax. Our proposals put councils in charge of their finances and, for the first time in the history of local government finance, give them a direct stake in the success of the local economy.

We recognise the crucial role that councils can play in helping with the cost of living. We have offered councils support so that they can freeze council tax bills, despite the fact that those bills doubled under the previous Government. Since 2010, council tax bills have fallen by an average of 10% in real terms. The total freeze funding up to 2015-16 is £5.2 billion. That is a serious commitment

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by the Government to help hard-working families. Over the lifetime of this Parliament, the average band D taxpayer could save up to £1,100 thanks to our council tax freeze. The Chancellor has agreed, as he has in previous years, to put the next two years of funding into the baseline. That eliminates any risk of a cliff edge and offers the maximum possible certainty to councils.

Everyone in this House should expect councils to do their bit for hard-working families. They must recognise that they have a duty to take up the freeze offer. Councils that do not accept the freeze and instead want to raise bills by 2% or more may do so, but only by holding a binding referendum. We believe that that strikes the right balance between direct and representative democracy. I say to all councils, take the freeze. If they do not do so, but want to avoid a referendum, the increase will benefit them to the tune of just 0.9%. My message to councillors who are considering that is to go back and push their officers to deliver more for their residents. We have given local electorates the power to veto excessive rises through a referendum. Councils should trust the people if they are confident that they have a case for putting up taxes.

Charles Hendry (Wealden) (Con): My hon. Friend has been very generous in giving way. Will he look again at the threshold for referendums for fire services, particularly small ones such as East Sussex? If they want to put their precepts up by £3 a year, which is less than 1p a week, it would raise £900,000, but doing so would require a referendum that would cost up to £750,000. That does not make sense and I ask him to look at it again.

Brandon Lewis: I thank my hon. Friend for that question. Local authority and fire authority treasurers often make that point. They say that they do not want to accept the freeze, but they want to build up their base. However, if they win a referendum, they get that in their base for ever, so I simply do not buy that argument. To answer my hon. Friend directly, last year we had a differential for the lowest charging authorities. We look at that on an annual basis. Although we are not doing it this year, we do not rule out doing it in future. With regard to referendums, there is a cost-saving opportunity for authorities this year, because we are allowing council tax referendums to be held on the same day as the European elections, which is 22 May.

So far, 161 councils have publicly announced that they intend to ease the monthly bills burden for families. As my hon. Friend the Member for Rugby (Mark Pawsey) mentioned, some authorities, such as Rugby, Croydon and Kensington and Chelsea, are even in a position to offer residents a one-off council tax rebate, so successful have they been in making savings. I expect many more councils to sign up to the freeze to make a difference to the cost of living for hard-working people and to demonstrate that locally elected leaders make the right choices for their electorate. I encourage councils to make the right choice and to offer a freeze for the fourth year.

Our do-it-yourself, reward-based mantra is a stark contrast to the old begging-bowl mentality. A substantial amount of money is available to local government in 2014-15. It is a bigger budget than the NHS and defence budgets. This settlement offers councils further freedoms, flexibilities and incentives to build more homes; to

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create more local jobs; to boost business and enterprise; and, ultimately, to provide more and better first-class services for their local residents.

5.53 pm

Andy Sawford (Corby) (Lab/Co-op): Local government faces the biggest cuts of any part of the public sector. All around the country, councils are having to take incredibly tough decisions about the future of local services.

The Minister is like an abstract artist—the picture that he has painted today is clearly a departure from reality. Nobody believes his figures. He has claimed that the cuts are modest. He says that they can all be dealt with through efficiencies and that there will be no impact on front-line services. He should tell that to the elderly people who have had their home care withdrawn. He should tell it to the parents of children with special needs who cannot get the help that they need. He should tell it to the shift workers in my constituency who have to walk home at night in darkness because the streetlights are not on. He should tell it to the young people whose bus to school, college or work no longer runs. He should tell it to the Tory council leaders who were so appalled at the lack of understanding of the impact of the cuts among Ministers in his Department that they wrote to the Prime Minister to complain about the posturing. He should tell it to the council leaders in the poorest areas of our country who face the cruellest, deepest cuts of all.

The real picture is stark. The LGA says that over this Parliament, local government core funding will fall by 40% and councils will have to make £20 billion of savings. As hon. Members have pointed out, all councils face challenges, but the fundamentally unfair distribution of the cuts is particularly damaging to many communities. Even under the Government’s spending power measure, which is deliberately designed to mask the real impact, the 10 most deprived areas have had a cumulative cut that is 10 times more than the 10 least deprived areas.

The Prime Minister used to say, “We’re all in this together”, but his local authority and that of the Secretaries of State for Justice, for Health, for Education and for Defence, are getting an increase in spending power, while local authorities such as Hackney, Liverpool—as we have heard—and Manchester face the largest cuts. The coalition peer, Lord Shipley, said in the House of Lords last month that

“there is no doubt that the cuts have been steeper in the more deprived parts of the country.”—[Official Report, House of Lords, 9 January 2014; Vol. 750, c. 1700.]

John Hemming (Birmingham, Yardley) (LD): If the Labour party wins the general election it proposes further cuts. What formula would it use to identify the equity or fairness of any distribution of cuts?

Andy Sawford: The Labour party has said that we accept the Government’s spending plans, but what we will not do is cut in such a fundamentally unfair way. I will come on to what the Labour Government will do.

Grahame M. Morris: Does my hon. Friend accept that the coalition Government are breaking the post-war consensus in which the revenue support grant was used to equalise resource allocation?

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Andy Sawford: My hon. Friend makes an incredibly important point and I will come to it in a moment.

The widely respected Joseph Rowntree Foundation published research in November stating:

“Cuts in spending power and budgeted spend are systematically greater in more deprived local authorities than in more affluent ones”

We know that that unfairness is not an accident. The former local government Minister, the hon. Member for Bromley and Chislehurst (Robert Neill), who is in his place, told the House,

“Those in greatest need ultimately bear the burden of paying off the debt”—[Official Report, 10 June 2010; Vol. 511, c. 450.]

As my hon. Friend the Member for Easington (Grahame M. Morris) rightly says, since 1948 funding has been allocated to local authorities according to need. In December, the National Audit Office, in its report on council tax support, commented on the end of the formula grant system which it claims

“redistributed business rates according to a formula that determined each local authority’s grant by considering local authorities’ needs and ability to raise resources through council tax.”

That system was by no means perfect—hon. Members have pointed out some of its shortcomings—but it became complex because it strived for fairness. Any reform must keep that principle of fairness at its heart.

Several hon. Members rose—

Andy Sawford: I will make progress on this point, and then I will take further interventions.

Will the Government tell the House what meaningful consultation there has been, and who gave them permission to remove a principle that has stood for 65 years—that councils should be funded according to need? The House of Commons Library states:

“Prior to 2013/14 local authorities received formula grant at the Local Government Finance Settlement. The formula used was based on a four block model which included its relative need. In the first year of the Business Rate Retention Scheme this link remained in the funding baselines, but the relationship between funding and need exists now only to the extent that they are present in the original baselines.”

As each year goes by, there will be further erosion of the relationship between funding and need. The Library clearly states that

“reductions are generally larger for more deprived areas and smaller amongst less deprived areas.”

Mr Graham Stuart: I am grateful to the shadow Minister for giving way; he is being most generous. I notice that he did not respond to the question from my hon. Friend the Member for Birmingham, Yardley (John Hemming) about where Labour would make cuts. On the issue of need, density was given four times the weighting of sparsity, even though there is no link between density of population and increased cost and delivery of services. How was that fair?

Andy Sawford: If the hon. Gentleman will be patient for a moment, I will, of course, come on to what Labour will do if it forms the next Government. On sparsity, I took part in the debate that he and others led last year, which I thought was excellent. I recognise many of the issues that he raised and there is a sparse rural authority in my constituency in East Northamptonshire. The formula should of course take account of rural sparsity, as well as urban deprivation. There is always a

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debate to be had about fairness within the system, but what is critical is that the part of local authority funding with fairness at its heart—notwithstanding the debate that will be had—is now being eroded, so the opportunity to ensure that funding is fair and according to need is being lost.

Paul Farrelly: To put the cuts in perspective, in Newcastle-under-Lyme in north Staffordshire, an area of great deprivation, we will now have lost half our Government grant. We face the prospect, in the near future, of losing 75% of grant. How can councils in those circumstances be viable and address local need satisfactorily?

Andy Sawford: My hon. Friend makes the point powerfully. The reduction in spending power of areas with higher needs and lower resources, and the increase in spending power in the wealthiest areas, will not just close the funding difference between such areas, but in time reverse it. That is already happening.

Mr Betts: Will my hon. Friend give way?

Andy Sawford: Of course I will give way to the Chair of the Select Committee on Communities and Local Government.

Mr Betts: My hon. Friend has made a very important point. I come back to the comments the Minister made in his appearance before the Select Committee on 27 January. I asked whether the principle of the grant settlement, which equalises differences in needs and differences in resources between authorities, had been effectively eroded. The Minister said yes, there had been a big shift away from the begging bowl structure of the past to an incentive-based structure for the future.

Andy Sawford: My hon. Friend makes the point powerfully, with all of his experience as Chair of the Select Committee.

Spending power in Leeds will be lower than Wokingham’s in 2014-15, and will fall every year despite higher service pressures. Spending power for my hon. Friend’s own authority of Sheffield and for Newcastle, which has also been mentioned, will broadly match Wokingham’s in 2015-16 and then fall below it in future years despite higher service pressures. The spending pressures that councils face are very different. Newcastle has 101 looked-after children per 10,000 people, whereas Wokingham has 24. Homelessness and supported housing costs are £145 per dwelling in Newcastle and £48 in Wokingham. Statutory concessionary travel costs are £85 per dwelling in Newcastle and £14 in Wokingham. Where is the fairness in a funding system that does not recognise such large differences in need?

The revenue support grant element, which recognises need, will shrink from £15.2 billion in 2013-14 to £9.3 billion by 2015-16. Modelling shows that it could be gone altogether by the end of the next Parliament. The Institute for Fiscal Studies, which the Government are fond of quoting, is clear in its analysis that the poorest areas are feeling the squeeze. Minority communities are particularly affected, too. Of the 30 areas in England with the highest black and minority ethnic populations, 29 face cuts above national average and eight face cuts

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of double the national average. The Department’s own impact assessment raises concerns about the effect of cuts on BME communities and about services to the very young, the elderly and the disabled. It says it is not possible to make a substantial assessment. I have to ask the Minister why not, given the scale of these cuts? Why has his Department not conducted a full impact assessment, as it was urged to do by the Public Accounts Committee?

Daniel Kawczynski: Under 13 years of the Labour Government we saw a huge increase in salaries for officers and chief executives in councils. I would like to have the hon. Gentleman’s views on how that can be controlled going forward, because it accounts for a great deal of money.

Andy Sawford: Chief officer pay is something that should, rightly, be determined locally. We would of course want local authorities to be responsible. I urge the hon. Gentleman to recognise, however, that some of the highest paid chief officers were in Conservative local authorities. We will not be taking any lectures on that point.

The Government seem to have introduced the term “spending power” to hide the true scale of the cuts. London Councils says that it is extremely concerned that the spending power calculation is misleading and incorrect. The Government say that spending power is the total amount of money available to a local authority but the LGA tells us that there is double counting, such as with health budgets that are also in the Department of Health’s figures. Rob Whiteman, the chief executive of the Chartered Institute of Public Finance and Accountancy says that

“these figures demonstrate…statement on the local government settlement this year was by any usual standards an…opaque announcement.”

The Minister says that the change to spending power is a shift in Government policy to reduce dependence. He uses that term about the begging bowl that, frankly, I find offensive. He says that this is about reducing dependence on central Government and freeing councils to encourage local growth. If that is true, we have to ask why it has taken so long for this Government to make a U-turn on business rates, which have risen by £2,000 since May 2010. Why will they not join this side of the House and go further by cutting rates for 1.5 million small and medium businesses? We agree, of course, that councils should not simply be a post-box for the Treasury, and schemes such as the local authority business growth incentive were introduced by the last Labour Government. We will look to reform any so-called incentivisation so that the system works fairly for all areas of the country and is alongside, rather than a replacement for, mechanisms for fair distribution of funding according to need.

Robert Neill (Bromley and Chislehurst) (Con): First, I find it ironic that the hon. Gentleman should criticise any change to the business rates model that his party resisted for so many years. Secondly, he talks in terms of the four-block model, which is generally regarded as discredited now. Would he persist with it or not?

Andy Sawford: The consensus around recognising need in local authority areas existed for more than 65 years, until this Government broke it. We have been

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clear that we will look in the next Parliament to restore fairness in the formula, and of course we will look to ensure that the model in place recognises need.

Several hon. Members rose—

Andy Sawford: Let me make a bit of progress. The Minister spoke for 38 minutes, and I know that many hon. Members wish to contribute.

It is to be welcomed that the Government are compensating local authorities for the cap on business rates, but I am told by SIGOMA that the compensation amounts appear to be less than the estimated reduction in total business rates. I hope that the Minister who responds to the debate will comment on that point. Holdbacks to fund the business rate safety net have also been top-sliced unfairly from councils. While Windsor and Maidenhead contribute to the £120 million holdback at a share of £2.27 per dwelling, Middlesbrough contributed £7.97 per dwelling. Why does the Minister think that is right?

I pay tribute to my colleagues, especially the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who led an important debate on this last year. There was a limited U-turn by the Government on holdbacks. But when the Minister replies today I hope that he can update the House on what recent assessment has been made on the business rate safety net.

Neil Parish (Tiverton and Honiton) (Con): I see that the shadow Minister is carrying on the same creative accounting as the last Labour Government. They say that they will stick to the same budget as we will, but they will reduce business rates. I welcome that, but where will they get the money from? They will have to cut it from somewhere else.

Andy Sawford: The hon. Gentleman will have to do a bit better than that. The reduction in business rates is clearly costed by not going ahead with the cut in corporation tax for the largest businesses in the country. It is a clearly costed policy.

The new homes bonus is another top-slice from the formula grant, and the Government seem confused about its purpose. Their website describes it as:

“A grant paid by central government to local councils for increasing the number of homes and their use.”

But the Housing Minister told the House recently:

“I am afraid the new homes bonus is not about encouraging people to build homes.”—[Official Report, 25 November 2013; Vol. 571, c. 11.]

The National Audit Office report on the new homes bonus said it certainly is not about increasing the number of homes, stating:

“Overall we found little evidence that the Bonus has yet made significant changes to local authorities’ behaviour towards increasing housing supply…We found no association between individual local authorities’ planning application approval rates and the numbers of homes qualifying for the Bonus.”

As the new homes bonus is a top-slice without a purpose, I can understand why local authority leaders and members are frustrated by the fact that it compounds the problem of unfairness—because of course it comes from the grant.

London Councils has brought to my attention the Government’s recent decision to require London local government to transfer £70 million of its new homes

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bonus grant to the GLA. That is a centralising step by the Government in London. Those councils want to know why they are being treated differently from the rest of the country, and I hope that when the Minister responds later he will justify that.

Other changes are having an impact on councils. There is much concern about the localisation of welfare support. The funding has been passed from the Department for Work and Pensions to the Department for Communities and Local Government, and has already been cut in half in the process. There are no plans for any funding to be available after 2015. Do the Government recognise the impact that that will have on the ability of councils to help the most vulnerable people in our communities?

That leads me on to the Government’s new poll tax for the poorest people. The cuts to council tax support mean that many people on the lowest incomes will see their council tax bills jump. These people are carers, the disabled, single mums, war widows and veterans, and they will all have to pay more council tax and, in some cases, the bedroom tax, the impact of which my hon. Friend the Member for Wansbeck (Ian Lavery) powerfully denounced earlier. Today the Prime Minister has again chosen not to rule out another tax cut for millionaires, so we can see where the Government’s priorities lie.

When people face a cost of living crisis, it is right that local authorities do their best to keep council tax down. In recent weeks, the Secretary of State has briefed the press that he would reduce the council tax referendum trigger, but he seems to have been overruled at the last minute by the Home Secretary and the Deputy Prime Minister. The whole process has been a complete shambles. SIGOMA has said that the late announcement of the threshold was unacceptable. Councillor Caitlin Bisknell of Derbyshire county council contacted me on the day of the announcement to tell me that the council was in the middle of a meeting to set its budget for next year when it was informed by the Government of the referendum limit. While the Secretary of State has been posturing and dithering, councils have been trying to plan ahead. Local councils and communities are the ones who are left to pick up the pieces of the Government’s incompetence.

For all the talk of a council tax freeze, more than a third of local authorities put council tax up last year. According to a recent survey by The Daily Telegraph, more than half the local authorities preparing to increase council tax this year are Conservative councils, including Oxfordshire, the Prime Minister’s county council, which plans to raise its bill for a second year running.

Mr Burrowes: Will the shadow Minister make it clear whether Labour supports the council tax freeze? I am sure he will come on to what he would hope to do if he had the opportunity in government, which I very much hope he does not. I have been reading the Public Finance magazine, which says that he is actively considering plans for new council tax bands. May we have those details now?

Andy Sawford: We are looking at representations that have been made to us by local government as part of our review on how we ensure that the funding formula is fairer in the next Parliament and fair to all councils. The hon. Gentleman mentions the council tax freeze, but there is no freeze. Many councils around the country are planning to put their council tax up. More than half

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of them are Conservative councils. Who blazed that trail? Councils such as Labour Hackney, which has been freezing council tax for eight years, did so. The three biggest council tax rises during the Labour period in power were by Tory councils.

The Minister has told us that local authorities can deal with the cuts by making sensible savings and reducing waste. The Prime Minister has described local government as the most efficient part of the public sector. While councils have had to make bigger and earlier cuts than any other part of the public sector and make massive savings, the Secretary of State has lumbered taxpayers with a limo bill of close to £500,000, reportedly the biggest of any Whitehall Department. The biscuit bill is rocketing, and the Department has even been fined for running an unauthorised overdraft. The Minister should therefore not patronise councils with his suggestions for savings.

Labour Hackney council’s social care services are supporting people to stay in their own homes and out of formal care, which saves £2 million annually. Bolsover and North East Derbyshire councils have pooled staff and resources and are saving £1.5 million a year. Blackburn with Darwen council saved £2.2 million in one year using pioneering telecare technology. Oldham council is using a co-operative commissioning approach for its children’s centres. The process is producing savings of £220,000 and protecting those vital children’s centres.

Despite the great work to make savings and reconfigure services in the best possible way for communities in the circumstances, the truth is that many local authorities are being pushed to the brink, as hon. Members have pointed out. LGA figures show that there is a big financial black hole in local government finances, which is widening by £2.1 billion a year. It is expected to reach £15 billion by the end of 2020. That is fuelling growing concerns that local authorities lack the ability to continue to deliver front-line services.

The LGA’s Conservative leader, Sir Merrick Cockell told the Communities and Local Government Committee that 86 authorities are near the tipping point of failure. The Government simply do not know how they will respond when councils fall over. When the permanent secretary to the Department for Communities and Local Government was questioned by the Public Accounts Committee, he said that councils have a statutory duty to balance their books. He is relying on that statutory duty in the face of reality. I am sure finance officers will do their best to advise councils on how to balance the books, but they are not magicians. The Minister must tell us what plans the Government have for when an authority becomes no longer viable.

Hon. Members have asked about the next Labour Government’s plans. We will not be able to stop the cuts or turn back the clock, but we will put fairness at the heart of the relationship between central and local government, and at the heart of our approach to local government finance. It is simply wrong that the most deprived local authorities and the communities that can least afford it are being hit hardest. It is often the areas with the highest demand for services that have the least capacity to raise income through business rates or council tax.

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It is crucial that we support councils to deliver economic growth in all areas of the country, and to do that we will extend the model of city deals throughout local government and devolve power over housing and planning and jobs and skills—for example, through co-commissioning of the Work programme. We would also take forward our Total Place programme, which, being far too limited in scope, has sadly stalled under this Government, despite its clear potential. Furthermore, the local government innovation taskforce set up by the Leader of the Opposition is developing an ambitious programme requiring central and local government to work together as we transfer much more power and responsibility to councils. In this way, while resources will be tight, councils will have a fair chance to find a way forward for their communities.

In conclusion, in the Chancellor’s spending review in May 2010, he said—[Interruption.] Hon. Members might want to listen—it is their policy, their announcement. The Chancellor said:

“The Government will…limit…the impact of reductions in spending on the most vulnerable in society, and on those regions heavily dependent on the public sector”

and that

“the Government will look closely at the effects of its decisions on different groups in society, especially the least well off, and on different regions.”

Sadly, on local government funding, that promise of fairness is not worth the paper it is written on. Far from being localists, the Government have shown themselves to be mean and meddling at every turn, and nowhere more so than in taking the most from the communities and the people in the greatest need.

Several hon. Members rose—

Madam Deputy Speaker (Dawn Primarolo): Order. It will be necessary to have a six-minute time limit on all Back-Bench contributions, although it might be necessary to revisit that later.

6.16 pm

Mr Geoffrey Cox (Torridge and West Devon) (Con): I wish I could say it was a pleasure to follow that speech.

The shadow Minister could have come to the House, in a statesmanlike way, and acknowledged that there was a serious crisis in the public finances that the previous Government made a considerable contribution to creating; that the Government faced a difficult task; that the four-block formula was widely discredited; that for 13 years under Labour council tax spiralled in areas such as mine, more than doubling and creating hardship for those on low wages and the elderly; and that for 13 years MPs for rural areas tried to persuade Ministers that the four-block formula did not capture need properly. Like most people, he knows it does not capture need or deal with the heterogeneous nature of rural deprivation, but rather discriminates against rural poverty and is fundamentally flawed. Instead, all we heard was that the system he would employ would be fairer—well, without the detail, nobody will believe that.

Torridge has the lowest wages in the country—lower than Liverpool, lower than Manchester, lower than the cities for which the shadow Minister was speaking, lower than other Labour-represented areas—the lowest

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average household incomes in Devon, the lowest income in Devon, the lowest output per capita in the south-west and the highest unemployment in the south-west. There are really deprived areas in these rural areas. For 13 years, Members on this side of the House, as well as some on his side, endeavoured to persuade the Labour Government that this formula was morally bankrupt, but all he can do is pick out and criticise specific aspects of how the Government have dealt with local government funding.

The problem is that the whole formula is wrong. I want to concentrate on certain difficulties that he acknowledged—although he did not say what he would do about them—concerning the highly discriminating way the system treats rural areas. Council tax has spiralled in rural areas: it is £86 per head higher than the average, yet they get £145 per head less in grant funding. Those of us who represent these areas, including, I believe, those on the Opposition Benches, feel that that is an inequity. What would he do about that? We have got to do something about it.

I have to say with regret to my hon. Friend the Minister that this Government are not doing enough about it. It is not enough to say that £11 million, with the extra £2 million that he has found today down the back of the sofa, corrects the anomaly that small rural district councils and shire county councils are facing. West Devon has had to take out the best part of 14% of its budget over the last three years. In Torridge, there are similar problems.

One point that the hon. Member for Corby (Andy Sawford) made with which I did agree was that this Government and any future Government that the Labour party may one day in the distant future form will have to decide whether they want small rural district and borough councils, because many of them—certainly some in the south-west—are on the brink of viability. I agree with the hon. Gentleman on that. It may be that we have to look hard at the whole question of the reorganisation of local government in those areas and at whether we can maintain them.

I urge my hon. Friend the Minister to look again at the issue of rural sparsity and fairness to rural areas. The issue seems to be widely acknowledged and what has been done so far is not sufficient. One of the most frustrating factors that those of us on the Government Benches have experienced in meeting the Secretary of State—he has been very good with his time, as has my hon. Friend the Minister—is that every time we present a case, we are told that the figures are not what we say they are. Yet there seems to be no agreed common ground as to what those figures are so that we can both talk on the same level and on the same playing field. I urge my hon. Friend to sit down with the campaign that is growing in momentum and force on this side of the House—I hope that he acknowledges that—and see whether we can agree common terminology and common ground as to what these figures mean, so that we can achieve fairness in the future. I respectfully suggest to the Government that that is something to which they need to attribute the greatest priority because there is a growing sense of frustration on the Government Benches which will not for much longer be capped, if I can put it that way. I hope that, in closing, my hon. Friend the Minister will be able to help us with that.

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I want to deal very briefly with the position of Devonshire county council, which is facing a huge problem following the recent severe weather. The new changes to the Bellwin formula are welcome but I understand that the formula does not deal with repair and maintenance. The Devonshire county council has £750 million—

Mr Graham Stuart: The East Riding was devastated by floods in 2007 and I am very interested to hear further observations from my hon. and learned Friend.

Mr Cox: My hon. Friend’s intervention enables me to say that the problem with the Bellwin formula is that it does not cover repair and is for a limited period. Repairs in the south-west, and particularly in Devon, are now up to a backlog of £750 million. I urge my hon. Friend the Minister to look again at the Bellwin formula to consider whether it properly takes account of the costs that large rural shires are facing after this hugely problematic and severe weather.

Sarah Newton (Truro and Falmouth) (Con): Does my hon. and learned Friend agree that this point is absolutely essential, because the Prime Minister, in his visit to Devon and Cornwall, made it clear that councils would be compensated for all the costs of clearing up after the storm? Confusion will creep in unless this is dealt with in the way that my hon. and learned Friend describes.

Mr Cox: I agree with my hon. Friend and I hope that my hon. Friend the Minister will consider that. The changes that have been announced recently are very welcome but they do not go far enough, particularly for large counties, such as Devon and Cornwall, that have huge road networks, many of which have a backlog of repairs that is being made massively worse by the current spate of bad weather. We are facing huge backlogs of repair and maintenance. The current formula does not go far enough to address those problems. The Prime Minister has made this solemn pledge and I hope, and am sure, that my hon. Friend the Minister will want to see that that is properly fulfilled.

In conclusion, I urge my hon. Friend the Minister to heed this point; the problem relating to the anomaly of small rural councils and county councils—shire councils—will not go away. Torridge and West Devon are facing an existential threat from the cuts that they have faced. In West Devon and in Torridge they have cut, cut and cut again. They have gone far beyond the 40 ways that were announced some time ago. I urge my hon. Friend to address that problem and the rural anomalies.

6.24 pm

Mr Clive Betts (Sheffield South East) (Lab): I want to address three fundamental unfairnesses in the settlement. The first is the lateness with which the Government made their decisions. Reference has already been made to the threshold for council tax increases. It is simply not fair for local councils to find that out when many of them had already come to their budgetary decisions. The Local Government Chronicle has just done a survey of 160 local council finance officers, 14% of whom admitted that they were basically scrambling around making changes to their budgets at the last minute in an attempt to anticipate what the threshold would be. Local authorities have a difficult job anyway, without the Government making it unnecessarily more difficult in that way.

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Secondly, let us look at the cuts that local government is once again facing compared with the rest of government. Around 20% of the grant to local authorities will be cut in this settlement and next year’s. That is far bigger than the cut to other Departments. Even by the Government’s own figures for spending power, the cut over those two years, excluding the ring-fenced grants for public health and the better care fund, is around 10%. Again, that is much bigger than for other Departments. The Local Government Association has calculated the real-terms cuts in Government support to local authorities over the course of this Parliament at 40%—more than twice that for other Departments. Are the services that people receive from their councils—road sweeping, refuse collection, public health, checking food hygiene, local leisure centres and parks—really less important than the services provided by all other Departments? I do not believe they are, but if they are in the Government’s mind, they have to justify that as the basis for extra cuts for local authorities.

Let us look at the distribution of unfairness among local councils. We heard an interesting analysis earlier from a number of my hon. Friends who asked the Minister questions. Essentially it boiled down to this. Councils with the highest grant have had the highest cuts; those councils had a higher grant because they had higher needs; therefore, councils with the highest needs have had the highest cuts. That is the logic of the situation.

John Hemming: Will the hon. Gentleman give way?

Mr Betts: I will give way once.

John Hemming: Earlier the shadow Minister was unable to tell the House how he would allocate the cuts that Labour would make to local government. Has the hon. Gentleman been told what the Labour party would do and, if so, will he tell the House?

Mr Betts: I am sorry, but if the hon. Gentleman wants me to invent a grant settlement in the course of a six-minute speech, I am not going to oblige him.

When the Minister appeared before the Select Committee on Communities and Local Government, he admitted a fundamental change of Government policy, away from a needs-based system. The only needs taken into account are those reflected in the baseline of business rates, which started with the new arrangement in 2013-14. The new term—the settlement funding agreement—is really composed of two parts: the business rate base and the revenue support grant. As the business rate base is held constant or increases with inflation each year, the totality of cuts that the Government make falls on the revenue support grant element of the settlement funding agreement. Within the revenue support grant is something called the council tax resource equalisation adjustment. That has been cut by 25% this year, yet it is the mechanism by which extra resources are given to the poorest areas with the most deprivation. Those areas have had the biggest cuts, with resources transferred away from them. That is how the mechanism works in practice.

We can add to that the new homes bonus, which of course is not a bonus from Government, but is top-sliced from other Government funding—on the basis, therefore, of the grant that authorities already have—and then

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transferred to authorities according to the homes they are building. The Minister might say that that is an incentive to build homes—that is not what the Housing Minister said last time he was asked—but in the end, that money comes from a top-slice of grant, which means that those authorities with the greatest need and the greatest amount of grant pay the most into the system in the first place, and most of them lose out in the totality of the process.

Reference has already been made to my authority, Sheffield. The Minister likes to make comparisons with other areas that have not had as much grant in the past, saying that the Government are only doing a bit of evening up. Wokingham does not have the same needs as Sheffield, but in 2015-16, if we exclude the ring-fenced public health and better care fund grants that can be spent only on what they are allocated for, the spending power of Sheffield will be the same as that of Wokingham. That is impossible to justify according to anybody’s definition of fairness and reasonableness. Leeds already has less spending power and Newcastle will have less in two years. That is simply unfair. Does anyone on the Government Benches want to justify the idea that Wokingham’s spending power after 2015-16 should be higher than Sheffield’s? That is the system that Ministers are creating.

As the Minister knows, I am not against bringing some incentives into the local government finance system. I understand the desire for some localisation of business rates. I am in favour in the longer term of councils having the chance to raise more money at a local level rather than being dependent on Government, as an important element of localism involves freeing councils up to raise funds as well as giving them more powers.

Paul Farrelly: Will my hon. Friend give way?

Mr Betts: I said that I would take only one intervention, so my hon. Friend will have to excuse me. Other Members want to get in.

The system is fundamentally broken and I support the proposals made by the LGA in its “Rewiring public services” document. Let us give local authorities a budget for a whole Parliament so that they can plan ahead and let us consider involving the LGA in the process of distributing grant. I want to go further than that. I want a fundamental review of local government finance based on three principles. First, we should give more powers and responsibilities to local authorities, building on community budgets and city deals and going further than they do. Secondly, let us consider giving councils more fiscal autonomy, as the Select Committee is in the context of fiscal devolution to cities. We can then see whether we can reach some agreement to enable councils to raise more of their own resources. Finally and fundamentally, when the Government distribute money to councils they must do it in a fair way that reflects needs and deprivation. That is the element that the Government have forgotten in this settlement.

6.32 pm

Sir Nick Harvey (North Devon) (LD): Last November, I joined 30 colleagues on the Floor of this House to present petitions calling on the Government to close the gap in local government funding between rural and urban areas by a mere 10% by 2020. The petitions

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included 1,700 signatures from my constituency. In my view, that was a modest ask and I believe that we should look to the Government to do at least that and more in brisk order.

I recognise the problems faced by the Department for Communities and Local Government in the era of austerity, the need to eliminate the deficit and, of course, the debt repayments that will follow even when the deficit has been eliminated, but I believe that local government is taking too much of the burden—more than other Departments—and that, as the hon. and learned Member for Torridge and West Devon (Mr Cox) said a few moments ago, some local authorities are now facing such difficulties that their viability is in doubt.

It is vital that the Government should face up to the crisis towards which we are heading at great speed. Fundamentally, my complaint is as follows: why should some of the poorest people in the country, on the lowest wages, pay far more in council tax and receive far less grant from central Government while at the same time local services erode around them? That is what is happening in Devon and it is certainly what is happening in my constituency. The district council grant has been halved since 2010 and the total budget has been cut by a third over that time. This year alone, the Government have sliced the grant to the district council by 13.4%.

As for the wider picture, the situation is frankly no better for Devon county council. By next year, it will have seen a 60% cut in Government grant during the lifetime of this Parliament. Our schools and our health system are underfunded and, as other Members have said, the current system is quite simply broken. Rural residents pay council tax that is on average £86 a head higher than urban residents. They receive £145 less in Government grant than their urban counterparts, and this is a funding gap as wide as 50%.

It is welcome that the Government recognise the principle of there being a problem, and that they have put in place this emergency grant for a second year running, but I am sorry to say that even at the enhanced level that has been announced for the grant today, it closes that gap by only £1.04 a head, and at this rate it will take us 86 years to put right the gap in council tax payments, and 145 years to put right the gap in Government grant. This is simply not an adequate response to the scale of the problem that is faced in many rural communities throughout the country.

The Government make much of the spending power measure and bandy that about. That is a flawed measure. It looks at the current council tax revenues and believes that it is acceptable for some areas to pay much higher council tax and sees no reason why that should not continue in perpetuity. It also obscures the scale and impact of reductions in funding and the challenges that councils now face. For example, under the spending power measure, Devon county council has lost only 1.5% as against a national average of 2.9% in the latest settlement. But that obscures the fact that it has lost 9% in revenue support grant and, as I said, the district in my area has lost 13.4% in Government grant. Similar figures can be seen throughout the country.

Paul Farrelly: The figures from Devon mirror the situation in Staffordshire. Does the hon. Gentleman agree that it is a funny sort of localism that imposes referendum limits centrally from Whitehall?

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Sir Nick Harvey: I agree, just as I think it is a funny form of localism that then starts trying to tell local authorities how often the bins should be emptied.

As the Chair of the Communities and Local Government Committee said, the whole model of local Government funding is now so fundamentally broken that there needs to be a cross-party endeavour to rebuild something from scratch on a blank sheet of paper. The situation that we are in now is untenable. Somehow or other, Whitehall convinces itself that by putting this degree of hardship on to local government, the public anger at seeing some of the services that impact on their daily lives most directly will miraculously be focused solely upon the local authorities that send out the bill. I say to my right hon. and hon. Friends that I simply do not believe that that is a sound political calculation. The public are not stupid and they will see the difficulties that local government, regardless of the party running any particular council, is facing at this time, and they will hold central Government to be responsible for it.

We have already heard from my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) in the next-door seat about the parlous state of the highways and roads, but Devon county council is now consulting about a programme of cuts that will end all its non-statutory obligations: ending the subsidy on meals on wheels; closing its day centres; getting rid of all its residential care homes; axing mobile libraries and the smaller local libraries; and doing away with the youth service, except for young offenders. This will cause absolute fury on the part of voters. I do not think that it is acceptable. We have people moving into our area who are aghast at the low level of public services that they find in comparison with other parts of the country that they have come from. This is just not acceptable. It cannot go on like this. I made a speech similar to this last year. I told Ministers that they needed to do something about it if they wanted my support in the Lobby. A year has gone by, they have done nothing about it and they will not have my support in the Lobby this evening.